Keysight forecasts quarterly profit above estimates on strong data center-led demand

Keysight Technologies forecast fourth-quarter profit and revenue above expectations on Tuesday, as a rapid buildout of AI data centers boosts demand for its software and tools, sending its shares up nearly 5%.

The Santa Rosa, California-based company, known for its electronic design, testing and simulation software used by chipmakers, telecommunications firms and automakers, expects fourth-quarter adjusted profit in the range of $3.34 to $3.40 per share and revenue of $1.93 billion to $1.95 billion.

Analysts expect profit of $2.70 per share, and revenue of $1.81 billion for the quarter ending October 31, according to data compiled by LSEG.

An AI-fueled boom in data center expansion has benefited Keysight over the last year and lifted third-quarter revenue for the communications solutions segment by 43%, reflecting 56% growth in commercial communications and 14% growth in aerospace, defense, and government.

The company's communications solutions segment, accounting for two-thirds of overall revenue, manufactures components such as transceivers that are used in data centers.

Keysight's overall revenue for the third quarter ended July 31 grew 36.5% to $1.85 billion, while adjusted profit rose to $3.07 per share.